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BBC 'fell short of expectations'

The BBC fell short of licence fee-payers' expectations with its hefty payments to some former staff, its governing body said today.

The BBC Trust said there had been successes, highlighting shows like Call The Midwife and Rev, b ut acting chairman Diane Coyle added: "There have also been some high-profile failures.

"The BBC's Digital Media Initiative project was closed at a cost of nearly £100 million.

"And there was the controversy surrounding past severance payments...

"Both of these episodes involved significant sums of public money and saw the BBC falling well short of what licence fee-payers expect."

Excessive payouts came under scrutiny last year when it emerged that d eputy director-general Mark Byford left the BBC with a total payout of £949,000 and former chief operating officer Caroline Thomson was given £680,000.

George Entwistle took £470,000 when he resigned as director-general in the wake of the Jimmy Savile scandal after being in the role for just 54 days, with 150 managers between them receiving £25 million in pay-offs.

The Commons Public Accounts Committee was critical of the payments in a report late last year, with the chairman saying the BBC had " put its reputation at risk".

Ms Coyle's comments came as the BBC published its annual report today, which also showed the amount paid to the broadcaster's top stars was slashed by more than £6 million last year.

The corporation had been heavily criticised for the amount it pays its top talent, with presenters including Jeremy Clarkson and Graham Norton reportedly among its biggest earners.

In its annual report for 2013/14, the BBC said talent pay was slashed by more than £6 million, bringing a 15% fall in its talent bill since 2009.

The number of senior managers was cut by 8% last year, while the number of top earners on salaries of more than £100,000 fell for the fourth consecutive year.

The BBC said it is "delivering on its commitments", with popular shows such as Sherlock and Happy Valley, despite an effective 26% reduction in funds available for BBC services over six years following a licence fee freeze and new commitments given to the BBC such as part-funding the superfast broadband roll-out.

BBC director-general Tony Hall is also pledging a 4% increase in spending on content and delivery over the next three years.

Last week BBC News announced plans to axe 415 posts to save £48 million a year by 2016/17. The cuts will be offset by around 195 new roles, meaning a net reduction of 220 jobs.

The BBC annual report shows that a total £3.62 million was made in severance payments to 22 senior management staff in 2013/14. That was down on the £5.06 million for 2012/13.

Severance payments to all staff, including senior managers, was £25.6 million in 2013/14 compared with £40.2 million in 2012/13.

The report also showed that "audience appreciation" has decreased for BBC1, BBC2, BBC3 and BBC4.

Ms Coyle said that the BBC had "found its feet" after a "bruising period".

She added: "The BBC executive has made good progress on its priorities for the past 12 months, and we are expecting further progress in the next year on areas including... the variety and originality of programmes, value for money and serving an increasingly diverse UK."

Audience appreciation of BBC television has fallen slightly for the first time in a number of years, to 82.1%.

The BBC defended the fall at a press conference, saying that it was because it had done so well the previous year with the London Olympics, the European Championship and the Diamond Jubilee.

Danny Cohen, director of television, added: "There's no doubt if you take 26% of your spending out, you are going to have an impact on how people feel about things.

"But I feel very, very confident in the quality of what we are doing, in its distinctiveness, and I feel very confident that the overall appreciation of our channels will grow."

A policy now caps pay-offs at £150,000.

But 12 payments were made above £150,000 - down from 23 in 2012/13 - in the period before the cap came into place.

The number of total severance payments decreased from 793 in 2012/13 to 413 in 2013/14.

Fiona Reynolds, senior independent director, said that, although there had been a "steadily declining level of severance pay"...."payments in some cases are still significant".

She said: "The BBC will also take a tougher approach to managing performance, ensuring that senior managers are held to account when performance falls short of what is expected and required."

She said the BBC had achieved a £27.7 million annual reduction to the senior manager pay bill.

Through redundancies, it said it had achieved cumulative savings of more than £55 million between 2009 and 2014, projected to reach £111 million by the end of 2017.

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